President Donald Trump’s decision to exit the Paris climate agreement reaffirmed what was already clear: The federal government is no longer leading American efforts to shrink our carbon footprint. But many state and local governments – along with businessesand consumers – aim to help fill this policy void.

At least a dozen governors have joined the United States Climate Alliance, committing their states to achieve emissions reductions consistent with President Barack Obama’s Paris pledge. More than 200 mayors are promising their cities will follow suit.

My research with my former student Shayak Sengupta about how cities can benefit from buying electric cars suggests that fuel-free municipal fleets can cut urban carbon footprints while improving public health and saving taxpayers money.

Most of those steps lies beyond the jurisdiction of cities. So how can they take climate action?

Urban governments most strongly impact emissions by influencing the behavior of local residents and businesses through building codes and incentives, public transit and urban planning. Buying increasingly affordable electric vehicles gives cities an additional opportunity to cut climate-warming emissions by reducing the amount of fossil fuels their vehicles consume.

Historically, cities and transit agencies turned to natural gas as an alternative fuel for fleet vehicles and buses. However, our previous research showed that natural gas does not provide significant emissions savings compared with gasoline cars or diesel buses.

Electric vehicles, however, can bring about clear-cut reductions in carbon emissions.

The electric vehicle market

That could soon change. Thirty cities, including New York, Los Angeles, Chicago and Houston, are seeking bulk-rate deals on electric vehicles. They’ve asked manufacturers to submit bids to supply up to 114,000 electric vehicles, ranging from police cruisers to trash haulers, at a total cost of roughly US$10 billion.

This surge in electric vehicle sales could make them more affordable not just for cities but for the rest of us too. That’s because emerging technologies typically get cheaper as production increases. A study by researchers from the Stockholm Environment Institute estimates that electric car batteries prices fall by 6 percent to 9 percent every time production doubles.

Some analystsforecast that as soon as 2025, electric cars will become cheaper than gasoline-powered cars. In some cases, they are already cheaper to own and operate over the vehicle’s lifetime, our research has shown. If cities help ramp up demand for electric cars faster than anticipated, this transition could happen even faster.

Municipal fleets

City-owned fleets are in some ways ideal candidates for electric-powered transportation. Cities operate large numbers of vehicles in densely populated areas, where emissions most endanger human health.

Local driving by municipal employees is well-suited for electric cars. For example, the Nissan Leaf now has a range of as much as 107 miles, and the Chevy Bolt can travel 238 miles without recharging.

Houston’s vehicles

We studied vehicle options available to Houston, which operates a fleet of about 12,000 vehicles, in 2015. Those options included two gasoline-powered Toyota sedans (the Corolla and the Prius), the natural gas-powered Honda Civic, the plug-in hybrid Toyota Prius and the fully electric Nissan Leaf. Since all these sedans seat five passengers, they are interchangeable.

Because Houston in 2015 bought 75 percent of its electricity from wind farms (it now draws even more of its power from wind and solar sources), we calculated that the fully electric Leaf would have reduced life cycle greenhouse gas emissions by 87 percent relative to the gasoline-powered Corolla over seven years. About half of those benefits would have been lost if the Leaf was charged from the fossil-heavy grid elsewhere in Texas.

Financially, the savings on fuel and maintenance would have more than offset the $12,000 premium for buying a Leaf instead of a Corolla. We estimated that Houston would have saved about 4 cents per mile while operating the Leafs, as long as enough charging stations were available. That’s even before counting any savings from bulk purchases or federal tax credits.

The Sacramento Municipal Utility District operates its own charging stations, making it easier for drivers to choose electric vehicles.AP Photo/Rich Pedroncelli

Charging stations

One significant problem holding back demand for electric vehicles is the shortage of charging stations. Greater availability of charging stations assures cities and consumers that full electrics like the Nissan Leaf can complete their trips, and lets plug-in hybrids like the Chevy Volt operate mostly in electric mode.

Electric municipal fleets won’t by themselves propel cities all the way to their Paris-based pledges. But by speeding the adoption of charging stations and cleaner cars, they could help curb emissions – while saving money for urban taxpayers and improving public health.

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One of our cars is crawling along these days and though we we’re not excited about buying another vehicle, we are excited about what type of vehicle it will be. Yes, you guessed it, an electric! After years of researching, a few drives here and there, and much advocacy, we’re planning to dive in head first.

Since we haven’t bought a car in years, there’s a lot of ground to cover. And adding in the electric vehicle (EV) component arguably compounds the legwork required to make sure we getting a good deal and minimizing obsolescence. The search got underway in Albany, NY when I drove a Nissan Leaf. In short, I was really impressed with how it handled. It felt like a solid car without all the noise and rumbling of a combustible engine — something you have to experience to appreciate. We’ve been looking for a used one in Upstate NY but not seeing too much inventory. I’ll have more updates soon.

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Most of us usually don’t use wealth and climate change in the same sentence. Jigar Shah and the Carbon War Room’s Ann Davlin were at SXSWECO yesterday to convince us things are changing. Their session,”Creating Climate Wealth,” showcased how individuals and businesses can capitalize on the climate chaos.

Davlin, who worked with Al Gore and at The Pentagon, started the discussion by reminding the audience that our society, even business, has had climate opportunities teed up before.

“This really isn’t all uncharted territory,” said Davlin. “A lot of today’s climate wealth environment was established by the success of the Carter administration.”

Most of us can associate the administration with solar panels on the White House, but Davlin highlighted the other policy and infrastructure decisions which helped set up many of the standards still used today.

“Everything from energy efficiency and vehicle emissions to power purchase agreements (PPAs) and the adoption of the Renewable Portfolio Standard (RPS), has some connectivity to the efforts of lawmakers decades ago,” said Davlin.

“All the pieces are coming together, and we’re at a point where we can move forward. Carter won bi-partisan support for favorable policies and it lead to job creation and clean energy momentum.”

Davlin cited the residential PACE market, aimed at funding energy improvements, as another engine of growth and carbon reduction. She urged the group to think about the balance between an economic and ecologic argument.

“The capital is there, it’s more about how do we go in and approach a particular investor segment,” said Davlin. “We need to think about describing the impact in either financial terms or climate terms,” she added.

Shah opened up with a dig at our obsession with technology, questioning the value of the next new app.

“We have this weird fascination about technology,” said Shah. “The reality is that new technology is not fascinating in our industry.”

Instead, it’s about “infrastructure.” Shah noted that even with a seemingly unending technology cycle, energy costs for the average American family have increased about $4000 per year per family.

“Nobody tells they’re mom that I work in infrastructure,” he joked. But it’s easier to understand the notion of infrastructure when he describes it in the context of how the solar industry built out its own processes and practices. He mentioned how early power purchase agreements (PPAs) drove demand and led to more stable and innovative financing models that have continued to spur along the solar industry.

The conversation also addressed the opportunities in the electric vehicle (EV) industry and more broadly, the transportation industry.

“So what’s the climate wealth strategy for getting people in EVs,” asked Shah.

He mentioned recent data from Triple AAA that shows U.S car owners spend about $900 per month to own a vehicle. Besides more predictable maintenance costs for EVs, Shah thinks transportation companies and manufacturers will continue to move towards a cost per mile model.

“What you’ll see is an increase in “cost-per-mile” entrepreneurs as more time transfers to that model,” he said. “Then the question is what do you do with all the wasted space, like unused parking spots and emptier garages.”

The parking spot problem is in the industry’s headlights, sometimes referred to as one of the last mile problems in transportation. He was asked about what cities can do address it and some of the other planning challenges.

“Basically, 1000 entrepreneurs need to be knocking on doors and getting contracts, and then those need to get financed” he said.

Once autonomous vehicles are factored in, things get more interesting. Both panelists said the insurance industry is already adapting to that, preparing for the increasing loads of data from vehicle-based systems. They imagined a scenario that’s not so different from what healthcare providers might glean from health trackers to adjust our premiums.

Davlin also mentioned how microgrids, small-scale stations that can operate independently, are getting pushback from municipalities. Drawing from her pitches to Wall Street and private equity firms, Davlin reinforced how assumptions can’t be made that stakeholders understand the bigger picture. She described some scenarios where energy efficiency funding had to be reframed around a more resilient and risk-based approach.

Shah was then asked about the value proposition for solar, and how it plays into more climate opportunities.

“Solar is now an $80 billion a year industry with rooftop systems being added about every three to four minutes,” said Shah. “The industry needs to take responsibility for creating the next model for utilities.”

The panelists were also asked what city officials could do to spark more business-driven climate strategies.

Shah singled out transportation and waste management as two of the biggest pieces looming for cities. To magnify the cost reduction opportunity, he said the the average U.S. city transports its waste roughly 350 miles for disposal.

He also used the recent food waste ban in Massachusetts to show how waste reduction can create growth. Because of that policy, says Shah, 1200 anaerobic digesters will be built over the next five years, which will create jobs and reduce transportation costs..

Waste water management is also a part of the portfolio, especially with many treatment facilities across the U.S. nearing capacity. Things like pre-treatment, desalination, and other filtering applications are spurring the water management sector.

“A lot of these solutions have two year payback periods,” said Shah. “At that point, you’re basically forcing people to save money.”

As the session closed, a Nike representative in the audience asked the panelists to share specifics on the top things corporations could do to impact these climate wealth strategies. Davlin cited what Nike itself was doing as a member of the Sustainable Leather Working Group.

“Nike is actually dictating how the life of an animal is managed, everything from how it is fed, to how it is slaughtered,” said Davlin.
“What that means is more job creation, and a more visible and sustainable supply chain, ” she added,

Shah jumped in on the supply chain piece, saying the “greening of supply chains” is the toughest challenge for multinational corporations.

“You have to change the contracts and configure them to reward your best suppliers,” he said. Part of the challenge is that adjustments to supplier agreements can impact short-term profits. But Shah urged companies to look past contracts and get more creative to drive growth, saying a company’s strategic partners can be rewarded in many ways.

“There’s still constraints to being driven through the Chief Sustainability Officer (CSO). But you have to make some financial commitments before any long-term strategy can really materialize,”said Shah